Question

Why do some countries impose tariffs on imported goods in the context of globalization? Choose the correct reason from the following options:

• A. To support free trade
• B. To protect local industries
• C. To attract investment
• D. To lower import costs

Hint:

Remember: \[ \boxed{\text{Tariff} = \text{Tax on Imports}} \] Tariffs make imported goods costlier and protect domestic producers from foreign competition.

Answer 1

The Correct Option is B

Step 1: Understand the meaning of tariff.
A tariff is a tax imposed by the government on imported goods. When foreign goods enter a country, the government may charge an additional tax on them. This increases the price of imported goods in the domestic market.

Step 2: Understand the purpose of tariffs.
In the context of globalization, goods from different countries compete with each other. Sometimes foreign goods are cheaper than locally produced goods. If cheaper imports enter the market freely, domestic producers may suffer losses.

Step 3: Protection of local industries.
By imposing tariffs, the government makes imported goods costlier. This helps local industries compete with foreign producers. It gives domestic producers time and opportunity to improve production, quality and efficiency.

Step 4: Eliminate the wrong options.
Tariffs do not support completely free trade because they restrict imports. They do not directly attract investment, and they do not lower import costs because tariffs actually increase the cost of imported goods. Therefore, Options (A), (C) and (D) are incorrect.

Step 5: Final conclusion.
Thus, countries impose tariffs mainly to protect local industries from excessive foreign competition. \[ \boxed{\textbf{(B) To protect local industries}} \]